Demanding standards

Nov 14, 2008 Editorial

The Government of Guyana is rightly concerned over the possible change of ownership or sale of majority shares at Le Meridien Hotel. The government is complaining it was not involved in any discussions about the matter.
Following the global financial crisis there were reports circulating that a sale of the establishment was imminent.
So far there has been no public announcement as to whether the hotel is now under new owners or whether there has been a sale of shares. The government remains rightly concerned about not been consulted or involved in any negotiations or discussions taking place as regards changes to share ownership of the hotel.
The government is an interested party and has every right to be aggrieved over being left out of the loop, more especially since it holds about four per cent of the shares in the hotel.
What should equally concern the government and the public at large are the reasons why the government chose to continue to have a minority shareholders presence in that entity.
There are no credible economic or financial reasons justifying the government’s decision to retain such an insignificant minority shareholding in the enterprise.
For one, its four per cent hardly gives it a say in the management or intended sale of the hotel.
The government ought to have been aware of its inability as a minority shareholder to influence the direction in which the hotel went by reference to its own minority shareholder interest in the Guyana Telephone and Telegraph Company where at least it is represented on the Board of Directors.
It is also not believed that these shares held in the hotel have yielded any significant dividend for the government.
The government therefore needs to explain to the Guyanese people why it chose to hold on to these shares during the divestment of most public enterprises in Guyana.
Most of the other public enterprises have been sold in their entirety with the government opting in most cases for the total disposal of its interest in these enterprises.
In the case of the DDL, for example, whose shares would have at least brought some return, the government chose to totally divest itself of any interest.
Why then did the government for over sixteen years opt for a four per cent interest in the Le Meridien? An explanation is needed from the government as to the rationale for this decision, more especially since it was faced with the option of divesting itself of its minority holdings in a company operating in a sector which has not lived up to the expectations of the government itself.
The government’s concern over the possible change of majority shareholding ownership in the hotel contrasts with its approach to the divestment of the Sanata Complex which was one hundred per cent owned by the people of Guyana but which has privatised in a highly controversial manner.
We hope that the government holds itself to the same standards which it expects of others. In the case of Le Meridien, it has expressed concerns over not being in the know about what is taking place as regards a change or transfer of shares.
The government as a minority shareholder still holds to the view that it ought to have been engaged.
In the same vein, the government ought to accept that the Guyanese people who were the 100 per cent owners of the Sanata Complex ought to have been advised as to just what are the real terms of the deal that it has entered into not only for that facility, but also for the other proposed hotel that is to be built in Kingston and for which millions of dollars have already been spent to improve the sewage lines in the area.
We accept that the government ought to have been at least advised as to what is taking place with the negotiations about the hotel.
Equally, we hope that the government itself would lead by example and lay before Parliament, the terms of the deals it has entered into with private investors as regards the privatization or lease of public property.

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